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Summary First Quarter 2011
 

• Net revenue: $3,036 million, +5%
• Operating income (EBIT): $445 million, +5%
• Net income*: $221 million, +5%
• Earnings per share: $0.73, +4%

*Net income attributable to Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care AG & Co. KGaA (the company or Fresenius Medical Care; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the full year and fourth quarter of 2010.

Revenue

Net revenue for the first quarter of 2011 increased by 5% to $3,036 million (+5% at constant currency) compared to the first quarter of 2010. Organic revenue growth worldwide was 3%. Dialysis services revenue grew by 5% to $2,285 million (+5% at constant currency) and dialysis product revenue increased by 6% to $751 million (+5% at constant currency).

North America revenue increased by 1% to $1,977 million including the impact of the new Medicare end-stage renal disease prospective payment system in the United States. Organic revenue growth was 1%. Dialysis services revenue grew by 1% to $1,782 million with a same market growth of 4%. Average revenue per treatment for U.S. clinics decreased to $348 in the first quarter of 2011 compared to $355 for the corresponding quarter in 2010 reflecting the targeted implementation of the new prospective payment system. Dialysis product revenue decreased by 2% to $195 million mainly due to lower pricing of renal drugs, partially offset by higher sales of dialysis products.

International revenue increased by 14% to $1,055 million. Based on constant currency, revenue grew by 13%. Organic revenue growth was 6%. Dialysis services revenue was $503 million, an increase of 23% (+21% at constant currency). Dialysis product revenue increased by 8% to $552 million and increased by 6% at constant currency, mainly driven by higher sales of peritoneal dialysis products, dialyzers, bloodlines, and products for acute care treatments.
 

Earnings

Operating income (EBIT) for the first quarter of 2011 increased by 5% to $445 million compared to $425 million in the first quarter of 2010. This resulted in an operating margin of 14.7% for the first quarter of 2011 compared to 14.8% for the corresponding quarter in 2010.

In North America, the operating margin increased from 15.7% to 15.8%. The margin development was mainly influenced by the favorable development of pharmaceutical costs and the negative effects of the implementation of the new Medicare end-stage renal disease prospective payment system in the United States.

In the International segment, the operating margin decreased from 16.4% to 16.2%.

Net interest expense for the first quarter of 2011 was $72 million, compared to $67 million in the first quarter of 2010. This development was mainly attributable to a higher debt level.

Income tax expense was $124 million for the first quarter of 2011 compared to $128 million in the first quarter of 2010 and reflecting effective tax rates of 33.3% and 35.6%, respectively.

Net income attributable to FMC AG & Co. KGaA for the first quarter of 2011 was $221 million, an increase of 5%, compared to the corresponding quarter of 2010.

Earnings per share (EPS) for the first quarter of 2011 rose by 4% to $0.73 per ordinary share compared to $0.70 for the first quarter of 2010. The weighted average number of shares outstanding for the first quarter of 2011 was approximately 302.3 million shares, compared to 299.6 million shares for the first quarter of 2010. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash Flow

In the first quarter of 2011, the company generated $175 million in cash from operations, representing approximately 6% of revenue. The cash flow generation was supported by increased earnings and negatively influenced by an unfavorable development of DSOs, primarily related to the introduction of the new Medicare end-stage renal disease prospective payment system in the United States, and raised inventory levels.

A total of $113 million was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $62 million compared to $250 million in the first quarter of 2010. A total of $339 million in cash was spent for acquisitions and investments, net of divestitures. Approximately $300 million of the expenditures was a minority investment in Renal Advantage Partners LLC, the parent company of Renal Advantage, Inc. Additionally, we have entered into agreements to provide renal products, pharmaceutical supplies and other services to Renal Advantage and Liberty Dialysis Inc.

Free cash flow after acquisitions, investments and divestitures was -$277 million, compared to $168 million in the first quarter of 2010.


Please refer to the appendix for a complete overview on the first quarter of 2011.

Patients – Clinics – Treatments

As of March 31, 2011, Fresenius Medical Care treated 216,942 patients worldwide, which represents a 9% increase compared to the previous year's figure. North America provided dialysis treatments for 138,392 patients, an increase of 4%. Including 21 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 139,887. The International segment served 78,550 patients, an increase of 20% over the prior year's figure.

As of March 31, 2011, the company operated a total of 2,769 clinics worldwide, which represents an 8% increase compared to the previous year's figure. The number of clinics is comprised of 1,823 clinics in North America (1,844 including managed clinics), and 946 clinics in the International segment, representing an increase of 3% and 19%, respectively.

During the first quarter of 2011, Fresenius Medical Care delivered approximately 8.17 million dialysis treatments worldwide. This represents an increase of 9%, compared to last year's figure. North America accounted for 5.24 million treatments, an increase of 4%. The International segment delivered 2.93 million treatments, an increase of 19%.

Employees
 

As of March 31, 2011, Fresenius Medical Care had 74,844 employees (full-time equivalents) worldwide, compared to 73,452 employees at the end of 2010. This increase of more than 1,300 employees is due to overall growth in the company's business and acquisitions.

Debt/EBITDA Ratio

The ratio of debt to Earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.30 at the end of the first quarter of 2010 to 2.55 at the end of the first quarter of 2011. The debt/EBITDA ratio at the end of 2010 was 2.38.

Rating

 

Standard & Poor's Ratings Services continues to rate the company's corporate credit as ‘BB' with a ‘positive' outlook. Moody's continues to rate the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch continues to rate the company's corporate credit as ‘BB' with a ‘positive' outlook.

For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.


Issuance of Senior Notes

In Feb. 2011 Fresenius Medical Care issued $-denominated and €-denominated senior unsecured notes due 2021 in the respective principal amounts of $650 million and €300 million. The coupon for the $ senior notes is 5.75%, while the coupon for the € senior notes is 5.25%. The net proceeds amounted to approximately $1,035 million.

Acquisition of dialysis service business from Euromedic

On Jan. 4, 2011, Fresenius Medical Care announced the signing of a purchase agreement to acquire International Dialysis Centers (IDC), Euromedic's dialysis service business for a purchase price of €485 million. Fresenius Medical Care is thus expanding its activities in the dialysis care market, especially in Eastern Europe, where IDC treats over 8,200 hemodialysis patients. The transaction remains subject to necessary regulatory approvals by the relevant anti-trust authorities and is expected to close in the second quarter of 2011. Upon completion, the acquired operations will add approximately $180 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction.


Outlook for 2011 raised

Based on the strong financial results in the first quarter of 2011 and the elimination of the so-called "transition adjustment" imposed on dialysis facilities (as part of the new Medicare end-stage renal disease prospective payment system) in the United States, the company raises its outlook for the full year 2011.

Revenue is now expected to grow to above $13 billion. Previously, the company expected revenue between $12.8 billion and $13.0 billion.

Net income attributable to FMC AG & Co. KGaA is now expected between $1.070 billion and $1.090 billion. Previously, the company expected net income between $1.035 billion and $1.055 billion.

For 2011, the company still expects to spend around 5% of revenue on capital expenditures and approximately $1.2 billion on acquisitions. The debt/EBITDA ratio is expected to be below or equal to 2.8 by the end of 2011, likewise unchanged from the previous guidance.

"We are pleased to report a successful first quarter of 2011 with strong operational performance – despite the expected implementation challenges posed by the new Medicare end-stage renal disease prospective payment system in the United States", said Ben Lipps, chief executive officer of Fresenius Medical Care. "We would again like to express our appreciation to the Centers for Medicare & Medicaid Services (CMS) and the Administration for making this correction, and for their willingness in the past years to work with the entire kidney care community in the process of establishing the new reimbursement system, helping to improve the quality of life of all dialysis patient covered by Medicare."

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the first quarter of 2011 on Wednesday, May 4, 2011, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The Company invites investors to view the live webcast of the call at the Company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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Fresenius Medical Care, the world's largest provider of products and services for individuals undergoing dialysis because of chronic kidney failure, anticipates a substantial increase in revenue and earnings for 2011. At the annual general meeting in Frankfurt/Main, Germany, today, Dr. Ben Lipps, the company's Chief Executive Officer, confirmed Fresenius Medical Care's full-year outlook, which was raised this month. The company expects revenues of over US$13 billion and net income* between US$1.07 billion and US$1.09 billion in 2011.

"Fresenius Medical Care is well positioned for future growth in the dialysis market," Lipps told shareholders. "We will continue to shape the future of the market and retain our leadership position. Making quality the priority, we will grow internationally, expand our product and service offerings and continue to innovate. Fresenius Medical Care will remain the world's leading renal therapy company."

Shareholders approved the 14th consecutive dividend increase with a large majority of 99.98%. The dividend will increase to €0.65 from €0.61 per ordinary share and to €0.67 from €0.63 per preference share.

As a result of the shareholder vote, the company's supervisory board shall continue to include Dr. Gerd Krick as Chairman as well as Professor Bernd Fahrholz, William P. Johnston, Dr. Dieter Schenk and Walter L. Weisman. Rolf A. Classon, Chairman of Hill-Rom Holdings Inc., was elected as a new member of the supervisory board. Shareholders also endorsed the management board's proposal to amend the supervisory board's remuneration system. In addition to the existing fixed remuneration, a variable, performance-related remuneration component based on the company's long-term performance will be introduced. This is in line with recommendations contained in the German Corporate Governance Code.

With a further majority of 98.86%, shareholders also approved cancellation of the previous conditional capital for servicing expired stock options and subscription rights for employees. The creation of new conditional capital to provide for the company's 2011 stock option program was also approved. For a period of five years, stockholders endorsed Fresenius Medical Care's repurchase of up to 10 percent of its registered share capital for use in the company's interest.

Shareholders approved the actions taken and decisions made by the supervisory board and the management board with a majority of more than 99%.

At the annual general meeting, 78.84% of the subscribed capital was represented. Only ordinary-share holders were entitled to vote.

*Net income attributable to Fresenius Medical Care AG & Co. KGaA

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Fresenius Medical Care AG & Co. KGaA ("the Company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced that it has completed the acquisition of Euromedic's dialysis service business effective June 30, 2011. This follows final regulatory approvals by the relevant antitrust authorities.*

*Except Portugal, where the review by the relevant antitrust authority is still ongoing

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Summary Second Quarter 2011

Net revenue $3,194 million +8%
Operating income (EBIT) $510 million +9%
Net income* $261 million +5%
Earnings per share $0.86 +4%

Summary First Half 2011

Net revenue $6,230 million +7%
Operating income (EBIT) $955 million +7%
Net income* $481 million +5%
Earnings per share $1.59 +4%

Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the second quarter and first half of 2011.

*Net income attributable to Fresenius Medical Care AG & Co. KGaA

Second Quarter 2011

Revenue

Net revenue for the second quarter of 2011 increased by 8% to $3,194 million (+5% at constant currency) compared to the second quarter of 2010. Organic revenue growth worldwide was 3%. Dialysis services revenue grew by 6% to $2,362 million (+4% at constant currency) and dialysis product revenue increased by 15% to $832 million (+7% at constant currency).

North America revenue for the second quarter of 2011 was at the same level as the corresponding quarter last year at $2,027 million including the impact of the new Medicare end-stage renal disease prospective payment system in the United States. Dialysis services revenue grew by 1% to $1,828 million with a same market growth of 3%. Average revenue per treatment for U.S. clinics decreased to $348 in the second quarter of 2011 compared to $356 for the corresponding quarter in 2010 reflecting the targeted implementation of the new prospective payment system. Dialysis product revenue decreased by 5% to $199 million, as increased sales of dialysis products could not entirely offset lower pricing of renal drugs.

International revenue increased by 26% to $1,163 million (+15% at constant currency). Organic revenue growth was 8%. Dialysis services revenue increased by 31% to $534 million (+20% at constant currency). Dialysis product revenue increased by 23% to $629 million and increased by 11% at constant currency, mainly driven by higher sales of peritoneal dialysis products, dialyzers, products for acute care treatments and dialysis machines.

Earnings

Operating income (EBIT) for the second quarter of 2011 increased by 9% to $510 million compared to $467 million in the second quarter of 2010. This resulted in an operating margin of 16.0% for the second quarter of 2011 compared to 15.8% for the corresponding quarter in 2010.

In North America, the operating margin increased from 16.4% in the second quarter of 2010 to 17.2% in the second quarter of 2011. This increase was mainly favorably influenced by the development of pharmaceutical costs and higher income from the joint venture with Vifor Pharma. Average costs per treatment for U.S. clinics decreased to $283 in the second quarter of 2011 compared to $292 for the corresponding quarter in 2010.

In the International segment, the operating margin decreased from 18.8% to 17.5% mainly due to unfavorable currency effects.

Net interest expense for the second quarter of 2011 was $75 million compared to $68 million in the second quarter of 2010. This development was mainly attributable to a higher debt level.

Income tax expense was $149 million for the second quarter of 2011 compared to $129 million in the second quarter of 2010. The effective tax rate increased to 34.2% from 32.4% mainly as a result of the positive effect in the second quarter of 2010 of the release of a $10 million valuation allowance.

Net income attributable to Fresenius Medical Care AG & Co. KGaA for the second quarter of 2011 was $261 million, an increase of 5% compared to the corresponding quarter of 2010. Net income increased by 10% if adjusted by the positive tax effect in the second quarter of 2010.

Earnings per share (EPS) for the second quarter of 2011 rose by 4% to $0.86 per ordinary share compared to $0.83 for the second quarter of 2010. The weighted average number of shares outstanding for the second quarter of 2011 was approximately 302.5 million shares compared to 300.0 million shares for the second quarter of 2010. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash Flow

In the second quarter of 2011, the company generated $311 million in cash from operations, accomplishing the targeted 10% of revenue. The cash flow generation was supported by increased earnings and negatively influenced by an unfavorable development of days sales outstanding (DSO) and raised inventory levels.

A total of $117 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $194 million compared to $175 million in the second quarter of 2010. A total of $784 million in cash was spent for acquisitions and investments, net of divestitures.

Free cash flow after acquisitions, investments and divestitures was -$590 million compared to -$26 million in the second quarter of 2010. This reflects the cash outflow related to the closing of the acquisition of Euromedic´s dialysis service business.

First Half 2011

Revenue and Earnings

Net revenue for the first half of 2011 increased by 7% to $6,230 million (+5% at constant currencies) compared to the first half of 2010. Organic revenue growth was 3% in the first half of 2011.

Operating income (EBIT) for the first half of 2011 increased by 7% to $955 million compared to $892 million in the first half of 2010. The operating income margin remained constant at 15.3% for the first half of 2011 as compared to the same period in 2010.

Net interest expense for the first half of 2011 was $146 million compared to $135 million in the same period of 2010.

Income tax expense for the first half of 2011 was $273 million compared to $257 million in the same period in 2010, reflecting effective tax rates of 33.8% and 33.9%, respectively.

For the first half of 2011, net income attributable to Fresenius Medical Care AG & Co. KGaA was $481 million, up by 5% from the first half of 2010.

In the first half of 2011, earnings per ordinary share rose by 4% to $1.59. The weighted average number of shares outstanding during the first half of 2011 was approximately 302.4 million.

Cash flow

Cash from operations during the first half of 2011 was $487 million compared to $643 million for the same period in 2010, representing approximately 8% of revenue.

A total of $231 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first half of 2011 was $256 million compared to $425 million in the same period in 2010. A total of $1,122 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was -$866 million compared to $142 million in the first half of last year.

Please refer to the attachments for a complete overview on the second quarter and first half of 2011.

Patients – Clinics – Treatments

As of June 30, 2011, Fresenius Medical Care treated 225,909 patients worldwide, which represents a 12% increase compared to the previous year's figure. North America provided dialysis treatments for 139,906 patients, an increase of 4%. Including 23 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 141,420. The International segment provided dialysis treatments to 86,003 patients, an increase of 28% over the prior year's figure.

As of June 30, 2011, the company operated a total of 2,838 clinics worldwide, which represents a 10% increase compared to the previous year's figure. The number of clinics is comprised of 1,826 clinics in North America (1,849 including managed clinics), and 1,012 clinics in the International segment, representing an increase of 2% and 26%, respectively.

During the first half of 2011, Fresenius Medical Care delivered approximately 16.56 million dialysis treatments worldwide. This represents an increase of 9% compared to last year's figure. North America accounted for 10.62 million treatments, an increase of 4%. The International segment delivered 5.94 million treatments, an increase of 18%.

Employees

As of June 30, 2011, Fresenius Medical Care had 77,081 employees (full-time equivalents) worldwide compared to 73,452 employees at the end of 2010. This increase of more than 3,600 employees is due to overall growth in the company's business and acquisitions.

Debt/EBITDA Ratio

The ratio of debt to Earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.46 at the end of the second quarter of 2010 to 2.77 at the end of the second quarter of 2011. The debt/EBITDA ratio at the end of 2010 was 2.38.

Rating

Standard & Poor's Ratings Services rates the company's corporate credit as ‘BB' with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch rates the company's corporate credit as ‘BB' with a ‘positive' outlook. For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.

Acquisition of Euromedic's dialysis service business completed

On July 1, 2011, Fresenius Medical Care announced that it has completed the acquisition of Euromedic's dialysis service business effective June 30, 2011. This follows final regulatory approvals by the relevant antitrust authorities except Portugal, where the review by the relevant antitrust authority is still ongoing.

Acquisition of Liberty Dialysis Holdings, Inc.

Fresenius Medical Care has executed a merger agreement with Liberty Dialysis Holdings, Inc., the holding company for Liberty Dialysis and Renal Advantage. The investment, including assumed debt, will be approximately $1.7 billion. In addition, Fresenius Medical Care previously invested approximately $300 million in Renal Advantage. The merger is subject to clearance under the Hart–Scott–Rodino Antitrust Improvements Act and is expected to close in early 2012. Liberty Dialysis Holdings, Inc. has annual sales of approximately $1 billion and operates approximately 260 dialysis clinics. Fresenius Medical Care anticipates that facilities may need to be divested to secure regulatory clearance of the transaction. The transaction will be financed from cash flow from operations and debt and is expected to be accretive to earnings in the first year after closing of the transaction.

Rice Powell, chief executive officer of Fresenius Medical Care North America and deputy chairman of Fresenius Medical Care, commented: "We are very pleased with this agreement. Both companies, Liberty Dialysis and Fresenius Medical Care, have three key assets in common: a strong commitment to continuous quality improvement, dedicated and highly-motivated staff and excellent physician partners."

Mark Caputo, chief executive officer and president of Liberty Dialysis Holdings, Inc, commented: "This combination of Liberty's model of integrating physicians into the clinical and operational management of the facilities with Fresenius Medical Care's focus on technology and experience with integrated delivery systems clearly gives us an opportunity to create a superior platform for innovation in the delivery of services and products and will further enhance the lives of patients entrusted to our care and reduce costs for the healthcare system."

Acquisition of American Access Care

Fresenius Medical Care has executed an agreement to acquire the U.S. based company American Access Care Holdings, LLC (AAC) for $385 million. AAC operates 28 freestanding out-patient centers primarily dedicated to serving vascular access needs of dialysis patients. Fresenius Medical Care currently operates 13 vascular access centers. The transaction is subject to clearance under the Hart–Scott–Rodino Antitrust Improvements Act and is expected to close in the fourth quarter of 2011. On completion, the acquired operations would add approximately $175 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction. The transaction will be financed from cash flow from operations and debt.

The acquisition enables Fresenius Medical Care to achieve critical mass in its vascular access business and has strategic importance by virtue of the scale, resources and operational efficiency it brings to its vascular access operations, particularly when considering the U.S. Government's proposal to include the type of access and the frequency of access-related infections within the quality outcome component of the dialysis bundled reimbursement system by 2014.

Sales and earnings outlook for 2011 confirmed

For the full year 2011, the company confirms its sales and earnings outlook.

Revenue is expected to grow to above $13 billion.

Net income attributable to Fresenius Medical Care AG & Co. KGaA is expected to be between $1.070 billion and $1.090 billion.

For 2011, the company expects to spend around 5% of revenue on capital expenditures and approximately $1.9 billion on acquisitions. Previously the company expected to spend approximately $1.2 billion on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2011 (previously below or equal to 2.8).

"Thanks to a consistent focus on quality, sustainable growth and expense control, we have maintained a strong operational performance this second quarter. We are particularly pleased with the success of our international region, given a persistently challenging business environment with the current debt crisis worldwide and the successful expansion of our clinic network in Asia-Pacific and Europe. North America continued to improve its operating margin and successfully cope with the challenges of the ongoing implementation of the new Medicare end-stage renal disease prospective payment system", said Dr. Ben Lipps, chief executive officer of Fresenius Medical Care. "Our acquisitions of Liberty Dialysis and American Access Care in the U.S. are important steps in our strategy of expanding our service network to achieve excellent patient care in a more cost effective integrated model."

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the second quarter and first half of 2011 on Tuesday, August 2, 2011, at 3:30 p.m. CEDT / 9:30 a.m. EDT. The company invites investors to view the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

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Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced the successful upsizing and extension of its accounts receivable facility with WestLB acting as agent. The facility has been increased from $700 million to $800 million and has been extended from one to three years. The new facility is due July 31, 2014. Its terms, based on commercial paper rates plus a margin, are overall more favorable for Fresenius Medical Care than in the previous facility.

Michael Brosnan, chief financial officer of the company, commented: "We are pleased to have successfully expanded and extended our accounts receivable facility with an improved and very favorable rate. We believe it demonstrates that investors are confident in the future of Fresenius Medical Care and that they clearly recognize our sustainable financial strength."

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Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its intention to sell euro- and U.S. dollar-denominated senior unsecured notes (together the "senior notes") with a maturity between 3 and 7 years. The offerings of the senior notes will be of a benchmark size. Proceeds from the offerings will be used for acquisitions, to refinance indebtedness and for general corporate purposes.

The euro-denominated senior notes will be issued by FMC Finance VIII S.A. and the dollar-denominated senior notes will be issued by Fresenius Medical Care US Finance II, Inc. Both issuers are wholly-owned subsidiaries of the company. The senior notes will be offered through a private placement to institutional investors and will be guaranteed jointly and severally by the company and its subsidiaries, Fresenius Medical Care Holdings, Inc. and Fresenius Medical Care Deutschland GmbH.

The proposed offering will not be registered under the Securities Act of 1933. The senior notes will be offered in the U.S. to "qualified institutional buyers" (QIBs) pursuant to the exemption from registration under Rule 144A of the Securities Act, and in exempted "offshore transactions" pursuant to Regulation S under the Securities Act. The senior notes may not be offered or sold in the U.S. unless registered under the Securities Act or pursuant to an applicable exemption from registration requirements.

Application has been made for admission of the senior notes to trading on the regulated market of the Luxembourg Stock Exchange.

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Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced the pricing of two tranches of euro- and U.S. dollar-denominated senior unsecured notes (together the "senior notes"). Proceeds amounting to approximately $950 million from the offering will be used for acquisitions, to refinance indebtedness and for general corporate purposes.

The coupon for the euro-denominated senior notes in the principal amount of €400 million due 2018 will be 6.5% and the coupon for the dollar-denominated senior notes in the principal amount of $400 million due 2018 will also be 6.5%.

Michael Brosnan, chief financial officer of the company, commented: "We are very pleased to have successfully completed this offering at favorable rates in the current market environment. It demonstrates our financial stability and flexibility for further pursuing our strategy of sustainable growth."

The euro-denominated senior notes were offered by FMC Finance VIII S.A., and the dollar-denominated senior notes were offered by Fresenius Medical Care US Finance II, Inc. Both issuers are wholly-owned subsidiaries of the company. The senior notes were offered through a private placement to institutional investors and will be guaranteed jointly and severally by the company and its subsidiaries, Fresenius Medical Care Holdings, Inc. and Fresenius Medical Care Deutschland GmbH.

The senior notes have not been registered under the Securities Act of 1933 as amended, but were offered to "qualified institutional buyers" (QIBs) in the U.S. pursuant to the exemption from registration provided by Rule 144A under the Securities Act and in exempted "offshore transactions" pursuant to Regulation S under the Securities Act. The senior notes may not be offered or sold in the U.S. unless registered under the Securities Act or pursuant to an applicable exemption from registration requirements.

Application has been made for admission of the senior notes to trading on the regulated market of the Luxembourg Stock Exchange.

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Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA ("the Company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced the pricing of euro-denominated floating-rate senior notes ("Senior Notes"). The aggregate principal amount to be issued is €100 million.

The Senior Notes will be issued at par and carry interest of three-months Euribor plus 350 basispoints. The Senior Notes will mature on October 15, 2016. The Senior Notes will be offered by FMC Finance VIII S.A., a wholly-owned subsidiary of the Company, in a private placement outside the United States to non-US institutional investors only. The Senior Notes will be guaranteed jointly and severally by the Company and its subsidiaries, Fresenius Medical Care Holdings, Inc. and Fresenius Medical Care Deutschland GmbH. The Company expects to close and settle the offering on October 17, 2011, subject to customary closing conditions.

Michael Brosnan, chief financial officer of the Company, commented: "We will take advantage of the additional market demand in excess of our recently issued fixed rate senior notes. We will use the proceeds to repay debt and for other corporate purposes".

The Senior Notes will not be registered under the Securities Act of 1933 as amended, and will be offered in exempted "offshore transactions" pursuant to Regulation S under the Securities Act. The Senior Notes may not be offered or sold in the U.S. unless registered under the Securities Act or pursuant to an applicable exemption from registration requirements.

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Summary Third Quarter 2011

Net revenue                 $3,242 million             +6%

Operating income
(EBIT)                         $534 million               +8%

Net income*                 $279 million               +13%

Earnings per share        $0.92                         +12%

Summary First Nine Months 2011

Net revenue                  $9,473 million            +7%

Operating income
(EBIT)                         $1,488 million             +7%

Net income*                 $761 million               +8%

Earnings per share        $2.51                         +7%

*Net income attributable to Fresenius Medical Care AG & Co. KGaA

Bad Homburg, Germany – Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today announced its results for the third quarter and first nine months of 2011.


Third Quarter 2011

Revenue

Net revenue for the third quarter of 2011 increased by 6% to $3,242 million (+4% at constant currency) compared to the third quarter of 2010. Organic revenue growth worldwide was 1%. Dialysis services revenue grew by 4% to $2,425 million (+3% at constant currency) and dialysis product revenue increased by 11% to $817 million (+5% at constant currency).

North America revenue for the third quarter of 2011 decreased by 1% to $2,050 million including the impact of the new Medicare end-stage renal disease prospective payment system in the United States. Dialysis services revenue decreased by 1% to $1,846 million with a same market growth of 3%. Average revenue per treatment for U.S. clinics decreased to $345 in the third quarter of 2011 compared to $359 for the corresponding quarter in 2010 reflecting the implementation of the new prospective payment system. Dialysis product revenue decreased by 2% to $204 million, as increased sales of hemodialysis products could not entirely offset lower pricing of renal drugs.

International revenue increased by 20% to $1,187 million (+13% at constant currency). Organic revenue growth was 6%. Dialysis services revenue increased by 26% to $579 million (+20% at constant currency). Dialysis product revenue increased by 15% to $608 million and increased by 7% at constant currency, mainly driven by higher sales of peritoneal dialysis products, dialyzers, solutions, concentrates and dialysis machines.

Earnings

Operating income (EBIT) for the third quarter of 2011 increased by 8% to $534 million compared to $493 million in the third quarter of 2010. This resulted in an operating margin of 16.5% for the third quarter of 2011 compared to 16.1% for the corresponding quarter in 2010.

In North America, the operating margin increased from 18.1% in the third quarter of 2010 to 18.3% in the third quarter of 2011. This increase was mainly favorably influenced by the development of pharmaceutical costs and a positive impact from a royalty adjustment for Venofer®. Average costs per treatment for U.S. clinics decreased to $279 in the third quarter of 2011 compared to $289 for the corresponding quarter in 2010.

In the International segment, the operating margin increased from 15.8% to 17.3% mainly due to lower manufacturing costs, favorable exchange rate effects and business growth in Asia-Pacific.

Net interest expense for the third quarter of 2011 was $68 million compared to $70 million in the third quarter of 2010. This development was mainly attributable to increased interest income related to the loan to Renal Advantage Partners.

Income tax expense was $163 million for the third quarter of 2011 compared to $153 million in the third quarter of 2010. The effective tax rate decreased to 35.0% from 36.2%.

Net income attributable to Fresenius Medical Care AG & Co. KGaA for the third quarter of 2011 was $279 million, an increase of 13% compared to the corresponding quarter of 2010.

Earnings per share (EPS) for the third quarter of 2011 rose by 12% to $0.92 per ordinary share compared to $0.82 for the third quarter of 2010. The weighted average number of shares outstanding for the third quarter of 2011 was approximately 303.2 million shares compared to 301.2 million shares for the third quarter of 2010. The increase in shares outstanding resulted from stock option exercises in the past 12 months.

Cash Flow

In the third quarter of 2011, the company generated $463 million in cash from operations, representing approximately 14% of revenue. The cash flow generation was supported by a favorable development of days sales outstanding (DSO) and increased earnings.

A total of $150 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions was $313 million compared to $263 million in the third quarter of 2010. A total of $49 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was $264 million compared to $176 million in the third quarter of 2010.


Nine Months Ended September 30, 2011

Revenue and Earnings

Net revenue for the first nine months of 2011 increased by 7% to $9,473 million (+4% at constant currency) compared to the first nine months of 2010. Organic revenue growth was 2% in the first nine months of 2011.

Operating income (EBIT) for the first nine months of 2011 increased by 7% to $1,488 million compared to $1,385 million in the first nine months of 2010, resulting in an operating margin of 15.7% compared to 15.6% for the first nine months of 2010.

Net interest expense for the first nine months of 2011 was $214 million compared to $206 million in the same period of 2010.

Income tax expense for the first nine months of 2011 was $436 million compared to $410 million in the same period in 2010, reflecting effective tax rates of 34.2% and 34.7%, respectively.

For the first nine months of 2011, net income attributable to Fresenius Medical Care AG & Co. KGaA was $761 million, up by 8% from the first nine months of 2010.

In the first nine months of 2011, earnings per ordinary share rose by 7% to $2.51. The weighted average number of shares outstanding during the first nine months of 2011 was approximately 302.7 million.

Cash Flow

Cash from operations during the first nine months of 2011 was $950 million compared to $1,027 million for the same period in 2010, representing approximately 10% of revenue.

A total of $380 million in cash was spent for capital expenditures, net of disposals. Free cash flow before acquisitions for the first nine months of 2011 was $570 million compared to $688 million in the same period in 2010. A total of $1,171 million in cash was spent for acquisitions, net of divestitures. Free cash flow after acquisitions and divestitures was -$601 million compared to $318 million in the first nine months of last year.

Please refer to the attachments for a complete overview on the third quarter and first nine months of 2011.

Patients – Clinics – Treatments

As of September 30, 2011, Fresenius Medical Care treated 228,239 patients worldwide, which represents a 9% increase compared to the previous year's figure. North America provided dialysis treatments for 140,422 patients, an increase of 3%. Including 22 clinics managed by Fresenius Medical Care North America, the number of patients in North America was 141,809. The International segment provided dialysis treatments to 87,817 patients, an increase of 18% over the prior year's figure.

As of September 30, 2011, the company operated a total of 2,874 clinics worldwide, which represents a 6% increase compared to the previous year's figure. The number of clinics is comprised of 1,838 clinics in North America (1,860 including managed clinics), and 1,036 clinics in the International segment, representing an increase of 2% and 14%, respectively.

During the first nine months of 2011, Fresenius Medical Care delivered approximately 25.46 million dialysis treatments worldwide. This represents an increase of 9% compared to last year's figure. North America accounted for 16.11 million treatments, an increase of 4%. The International segment delivered 9.35 million treatments, an increase of 18%.

Employees

As of September 30, 2011, Fresenius Medical Care had 77,825 employees (full-time equivalents) worldwide compared to 73,452 employees at the end of 2010. This increase of more than 4,300 employees is due to overall growth in the company's business and acquisitions.

Debt/EBITDA Ratio

The ratio of debt to Earnings before interest, taxes, depreciation and amortization (EBITDA) increased from 2.37 at the end of the third quarter of 2010 to 2.55 at the end of the third quarter of 2011. The debt/EBITDA ratio at the end of the second quarter 2011 was 2.77.

Rating

Standard & Poor's Ratings Services rates the company's corporate credit as ‘BB' with a ‘positive' outlook. Moody's rates the company's corporate credit as ‘Ba1' with a ‘stable' outlook, and Fitch rates the company's corporate credit as ‘BB+' with a ‘stable' outlook. For further information on Fresenius Medical Care's credit ratings, maturity profiles and credit instruments, please visit our website at www.fmc-ag.com / Investor Relations / Credit Relations.

Acquisition of American Access Care Completed

The American Accesss Care (AAC) acquisition was closed effective October 1, 2011. AAC operates 28 freestanding out-patient centers primarily dedicated to serving vascular access needs of dialysis patients. The acquired operations will add approximately $175 million in annual revenue and are expected to be accretive to earnings in the first year after closing of the transaction.

Vifor Fresenius Medical Care Renal Pharma Ltd. Formation Completed

After the recent clearance by the European Union antitrust commissions the formation of Vifor Fresenius Medical Care Renal Pharma Ltd. has been completed globally on November 1, 2011.

Acquisition of Liberty Dialysis Holdings, Inc.

The acquisition of Liberty Dialysis Holdings, Inc. is on schedule and is expected to close in the first quarter of 2012.

Issuance of floating rate senior notes

In October 2011, Fresenius Medical Care issued €-denominated floating rate senior notes in the principal amount of €100 million, due 2016. The coupon is equal to the three-month Euribor rate plus 350 basis points.

Issuance of senior notes

In September 2011, Fresenius Medical Care issued $-denominated and €-denominated senior unsecured notes in the principal amounts of $400 million and €400 million, respectively, both due 2018. The coupon for the $ senior notes is 6.5%, and the coupon for the € senior notes is also 6.5%. Proceeds amounting to $949 million from the offering were used for acquisitions, to refinance indebtness and for general corporate purposes.

Sales and earnings outlook for 2011 confirmed

For the full year 2011, the company confirms its sales and earnings outlook.

Revenue is expected to grow to above $13 billion.

Net income attributable to Fresenius Medical Care AG & Co. KGaA is expected to be between $1.070 billion and $1.090 billion.

For 2011, the company expects to spend around 5% of revenue on capital expenditures and approximately $1.9 billion on acquisitions. The debt/EBITDA ratio is expected to be below 3.0 by the end of 2011.

"With our execution to date we continue to achieve a strong operational performance with a strong focus on quality and expense control. We expect further earnings momentum in the fourth quarter this year, supported by the recent acquisitions and cost management. We are fully on track to achieve our full year guidance", said Ben Lipps, chief executive officer of Fresenius Medical Care. "We are particularly pleased with our success globally, given a persistently challenging business environment and the ongoing implementation of the new prospective payment system in the U.S. Our emphasis on innovation and patient care continues to serve us well."

Conference Call

Fresenius Medical Care will hold a conference call to discuss the results of the third quarter and first nine months of 2011 on Wednesday, November 2, 2011, at 3:30 p.m. CET / 10:30 a.m. EDT. The company invites investors to listen to the live webcast of the call at the company's website www.fmc-ag.com in the "Investor Relations" section. A replay will be available shortly after the call.

Contact

Head of Corporate Communications
T +49 (0) 6172 608-96008
pr-fre@fresenius.com

Documents

Text as PDF document (PDF, 22 KB)

Fresenius Medical Care AG & Co. KGaA ("the company" or "Fresenius Medical Care"; Frankfurt Stock Exchange: FME / New York Stock Exchange: FMS), the world's largest provider of dialysis products and services, today introduced the 2008K@home, a hemodialysis system for use at the patient's home, at the American Society of Nephrology's Kidney Week 2011 meeting in Philadelphia, USA. The 2008K@home machine is built on the 2008® series hemodialysis machine platform that has delivered superior hemodialysis therapy for over 30 years. This machine combines safety, efficacy and reliability with a simple user-interface that incorporates an on-screen tutorial to walk the user through set-up, treatment, and disconnection from therapy. Earlier this year, the U.S. Food and Drug Administration (FDA) cleared the 2008K@home machine for use.

"With the growing interest in home therapies in the U.S., the 2008K@home machine provides another option for delivering hemodialysis to patients who want the freedom associated with being at home," said Maureen Lyden-Green, Vice President for Home Therapies at Fresenius Medical Care North America. "The 2008K@home provides patients with a smaller version of the in-center machine and allows flexibility to deliver a customized physician's dialysis prescription for each patient, meeting the patient's medical needs and suiting their lifestyle," continued Chief Medical and Regulatory Affairs Officer Dr. Jose Diaz-Buxo.